What fee can Body20 charge if it assumes management of a Body20 Studio after a default?

According to Body20's 2025 Franchise Disclosure Document, if Body20 exercises its right to manage a studio due to franchisee default, as specified in Section 14.2(b)(viii) (Other Remedies), the franchisee must pay Body20 a Management Fee. This fee is equal to 10% of the studio's Gross Sales, in addition to Body20's direct out-of-pocket costs related to the management, including travel and living expenses for Body20's representatives. The Management Fee is in addition to any other amounts due under the Franchise Agreement.

This means that if Body20 takes over the management of a studio, the franchisee will not only lose control of their business but will also incur a significant expense. The 10% of gross sales, combined with covering Body20's expenses, could substantially cut into any potential profits the studio might generate. This fee structure incentivizes franchisees to avoid default and maintain proper management of their Body20 studio.

It is important for prospective Body20 franchisees to understand that this management fee is separate from other fees outlined in the agreement, such as royalty fees, brand fund fees, and technology fees. The FDD also mentions Non-Compliance Fees, which may be charged for violations of the Franchise Agreement or failure to comply with standards set forth in the manuals, potentially adding to the financial burden during a period of default management by Body20.